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Legislation Would Establish VMT Fee Pilot Program

On December 3, 2013, a bill was introduced in the U.S. House of Representatives to establish a national vehicle miles traveled (VMT) fee pilot program. VMT fees would charge drivers a fee based on actual miles driven, rather than fuel consumption as is currently done through motor fuel tax. The Road Usage Fee Pilot Program Act of 2013 would provide $30 million in competitive grants to establish pilot programs that collect and report miles driven, determine payment, provide enforcement, and ensure privacy. The competitive grants could also be used to implement road user fee programs in jurisdictions that have already planned for them.

The bill specifies a number of topics for the pilot projects to address (for example, geographic and income equity), as well as a number of preferred factors for proposals to include (such as multistate projects and projects that integrate with state and local revenue systems). It would also establish three working groups to investigate a number of specific issues, including technological compatibility, administrative costs, and potential application to travel demand management.

Under the bill, state governments, local governments, metropolitan planning organizations (MPOs), rural transportation planning organizations (RTPOs), and tribal organizations would be eligible to apply for the competitive grants. Further, the bill would reserve at least 10 percent of the competitive grants for projects carried out in conjunction with MPOs or RTPOs. Recipients of the grants would be required to provide a 20-percent funding match.

The filing of the Road Usage Fee Pilot Program Act reflects recent legislative interest in alternatives to transportation funding. In July 2013, the Oregon legislature voted to establish a road usage fee program at the state level. Introduced this month in the U.S. House of Representatives, the UPDATE Act would raise the federal motor fuel tax by 15 cents per gallon over three years and index the rate to inflation. The UPDATE Act also calls for an end to the federal gas tax by 2025 and includes a "Sense of Congress" resolution supporting implementation of a mileage-based user fee.

GO TO 2040 calls for sustainable revenues for the transportation system and recognizes the structural challenges that face the motor fuel tax. Levied on a per-gallon basis, the motor fuel tax has lost considerable purchasing power due to inflation and improvements in vehicle fuel economy. In fact, CMAP estimates that the higher Corporate Average Fuel Economy standards announced in 2012 would reduce state motor fuel tax collections in Illinois by over 36 percent through 2040. GO TO 2040 calls for a long-term replacement of the motor fuel tax with user fees, such as a VMT fee, that more accurately connect drivers' use of the transportation system to revenue collections.